80 FR 56530 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 181 (September 18, 2015)

[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Notices]
[Pages 56530-56531]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23397]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75911; File No. SR-ISE-2015-29]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Amend the Schedule of Fees

September 14, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on September 9, 2015, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the self-regulatory organization. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The ISE proposes to amend the Schedule of Fees to eliminate the 
disaster recovery network fee charged to telecommunications vendors 
that connect to the Exchange's backup datacenter in New York. The text 
of the proposed rule change is available on the Exchange's Web site 
(http://www.ise.com), at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in sections A, B and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for,the Proposed Rule Change

1. Purpose
    The Exchange rents cabinet space in its backup datacenter to 
unaffiliated telecommunications vendors that are responsible for 
redistributing connectivity to market participants that desire access 
in order to maintain connectivity to the ISE when the primary 
datacenter is not operational.\3\ The disaster recovery network fee 
assessed to these telecommunications vendors is based on the amount of 
cabinet space used by each vendor, and is $2,300 per month for a half-
cabinet and $2,800 per month for a full cabinet. The fee is designed to 
recover the cost of running the backup datacenter, including space, 
power, and cooling, and also reflects the value that these 
telecommunications vendors receive from contracting with market 
participants that use their services to connect to the backup 
datacenter.\4\ As the Exchange is in the process of moving its backup 
datacenter to a new facility that members will be able to connect to 
directly, the Exchange now proposes to eliminate the fees charged to 
telecommunications vendors that are connected to the current site. The 
telecommunications vendors that are connected to the backup datacenter 
provide access to members that need connectivity, and are expected to 
keep providing this access while members are gradually transferred over 
to the new disaster recovery site. With the upcoming changes, however, 
the telecommunication vendors, who have already paid substantial 
hardware and other costs in addition to the fees charged by the 
Exchange, may not be able to recoup fees from sufficient market 
participants to cover the cost of maintaining their connections during 
this period. The Exchange therefore believes that it is appropriate to 
eliminate the disaster recovery network fee at this time, and believes 
that doing so will allow telecommunications vendors to continue to 
provide access to the backup datacenter.
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    \3\ For operational reasons, market participants are not 
permitted to connect directly to the backup datacenter, and must go 
through a telecommunication vendor.
    \4\ Telecommunications vendors contract with interested market 
participants that access the datacenter through their services for a 
fee. With this arrangement, the fees that ISE charges 
telecommunications vendors can be spread across multiple market 
participants.

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[[Page 56531]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and Section 
6(b)(4) of the Act,\6\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is reasonable, equitable, and not 
unfairly discriminatory to eliminate the disaster recovery network fee 
as the Exchange is in the process of moving its backup datacenter to a 
new facility. During the period of this move, the Exchange expects that 
the telecommunications vendors currently connected to the backup 
datacenter will continue to provide access to interested parties in 
order to facilitate access to the Exchange in the event the primary 
datacenter is not operational. As members move their connections over 
to the new backup facility, however, the telecommunications vendors 
will be able to provide service to an increasingly narrow field of 
market participants. Given the expected reduction in the demand for 
connectivity through the telecommunication vendors, and the substantial 
hardware and other costs the vendors have already incurred in 
establishing and maintaining connectivity to the backup datacenter, the 
Exchange has determined to eliminate the disaster recovery network fee. 
The Exchange believes that eliminating this fee during the crossover 
period will facilitate access to the backup datacenter while the 
Exchange moves over to its new facility by making it economical for the 
telecommunications vendors to remain connected and to continue to 
provide connectivity to interested market participants.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\7\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange is 
eliminating a fee charged to telecommunications vendors connected to 
the backup datacenter in anticipation of its move to a new facility. 
This change will facilitate access to the backup datacenter by making 
it economical for the telecommunications vendors to maintain their 
connections so that market participants can connect through them until 
they are moved over to the new backup datacenter, and will not impose 
any burden on competition.
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    \7\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\9\ because it establishes a due, fee, or other charge 
imposed by ISE.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-ISE-2015-29 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-ISE-2015-29. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File No. SR-ISE-2015-29 and should be 
submitted on or before October 9, 2015.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Brent J. Fields,
Secretary.
[FR Doc. 2015-23397 Filed 9-17-15; 8:45 am]
BILLING CODE 8011-01-P